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Thursday, November 3, 2011

Retracement Target Met

We reached the 1250 level and more today and now we have a nice potential Head and Shoulders set up. However, prices need to turn down mañana for this formation to be valid (or at least respect the 200 day MA). The market did close above the TA at 1251 which potentially reverses yesterday's signal. However, I am inclined to think selling will resume and we will probably test the 1218 recent low or even go into the 1180 area. We just need to see a catalyst which most likely will be Greece or Italy. Also, if 1218 holds it will be enough of a correction to launch another bullish wave past the 1300 mark.

I went short today at 1256 and using the 200 day ma as stop. I also unloaded some londs I had re-bought the other day for a good profit and will be going long again at another bearish extreme.